Supply issues threaten alumina industry

INVESTMENT in Australia's alumina refinery industry is being squeezed out by the uncertainty around the future of domestic gas supply, the industry association said on Thursday.

Executive director of the Australian Aluminium Council, Miles Prosser, raised the industry's concerns after a report released on Wednesday highlighted the risks the booming export of gas posed to Australian manufacturers.

Mr Prosser said the boom in LNG exports was impacting the alumina industry's ability to secure long-term supply for refineries around the country.

The alumina industry, including the large refinery in Gladstone, Central Queensland, relies on a secure supply of both bauxite and gas to refine the bauxite, to make aluminium.

"If Australia's world-class alumina industry is to continue growing and therefore maximising the returns on Australia's vast reserves of bauxite, our industry must be able to access reliable and competitive sources of natural gas - which is not currently the case in Australia's natural gas markets," Mr Prosser said.

He urged all Australian governments to recognise the issues around domestic natural gas and to take steps to minimise the impact on value adding industries such as alumina refining.

Mr Prosser's call for action on domestic gas supply came the same day Energy Minister Martin Ferguson was in Singapore, promoting Australia's ability to export LNG to overseas consumers.

Mr Ferguson told a Singapore industry gathering it could play a crucial role as a commodity trading centre for Australia's projected exports of more than 750 million tonnes of LNG by 2016-17.

"Singapore's role in this regard is growing as spot markets are increasingly used in other commodities such as coal and iron ore," he said.

"And Singapore has ambitions to extend this to LNG over the coming decade."